A Look at the Proposed 1% Sales Tax for School Construction and Renovation Projects in Nelson County

(Note: This article is being provided by the Nelson County Democratic Committee to help inform voters about the Nov. 3 referendum and is not an endorsement.)

This referendum exposes a problem that impacts school divisions all over the state — by Virginia law, public schools cannot raise money for school projects or save money, except in limited circumstances, from one year to the next. This has led to friction between the local government and school divisions over both annual operating and multi-year capital budgets leading to a la rge number of inadequate school facilities and lots of deferred school maintenance projects. This year a new state law is allowing citizens to tell local governments to raise sales taxes up to 1% on retail items (except food, alcohol, prescription drugs, and personal hygiene items) for school capital projects via a referendum.

The Nelson County Board of Supervisors voted in July to put the following referendum, as allowed by the new law, on the general election ballot on November 3, 2026:

Shall Nelson County, Virginia be authorized to levy a general retail sales tax at a rate not to exceed one percent, with the revenues to be used solely for capital projects for new construction or major renovation of schools serving Nelson County, Virginia including related bond and loan financing costs, and with the tax expiring on July 14, 2046?

__ Yes

__ No

In a presentation by financial advisors in July 2026, they showed the Board of Supervisors that the current and already applied “local option sales tax” of 1% brought in $2.4 million in FY2026 (this is added to the 4.3% state retail sales tax for a current sales tax rate of 5.3%) and is budgeted for $2.5 million in FY2027. However, because of the food/beverage/personal hygiene exclusion for schools, an additional 1% sales tax for Schools would only generate about $2 million per year (and bring the total tax burden for non-excluded items to 6.3%). Furthermore, visitors to Nelson County pay about 22% of all retail sales tax in Nelson County.

If this referendum passes in November, the Nelson County board of supervisors would need to adopt an ordinance enacting the new sales tax in December for the sales tax to be effective no earlier than May 1, 2027. Therefore, neither the Schools nor the County could plan on the additional revenues until FY2028 and the additional tax would end in FY2046.

What would the Schools be able to do with this additional revenue? There is a backlog of Capital Improvement Projects - building-wide HVAC replacement at the 27-yr old Rockfish River Elementary School (highest priority, costing approximately $1.8 million), weather barrier installation and roof replacement at the 31-yr old Tye River Elementary School, and continuing modernization of aging systems at the Middle School and High School Complex (portions of which were built in 1955, 1963 and 1974). The County would benefit from this new revenue by dedicating less of the local tax revenues to School capital projects (although it still would carry the majority of the cost for the Schools annual operating budget and bus and vehicle replacements).

— As reported by Debbie White, 8/20/2026